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Tool 3: Matching Use and User

Conventional planning thinking sees the use of a property as having no relationship to the user. When it comes to reusing problem properties in urban areas, and making sure that they are used in the way that best benefits the community, the use and the user are closely connected. Each potential use defines a pool of appropriate users, and another pool of potential users who may not be appropriate. If the goal is to see high-quality new housing built, the land bank or other entity that controls the property should look for a developer with a solid track record. If the goal is to promote a community-serving green reuse, like a community garden or playground, the entity controlling the property should look for a CDC or neighborhood organization.

Properties should be conveyed to responsible entities that have both the commitment and the capacity to reuse the property consistent with a city or neighborhood plan or strategy; and properties should be conveyed to them on terms that maximize the likelihood that the use will take place in the way envisioned in the plan. This may often mean that the city or other public agency may have to choose between getting the highest price for the land or building and getting a use which will provide the greatest long-term benefit to the neighborhood and the city.

Long-term versus short-term considerations

A constant issue in local government is the tension between short-term and long-term goals and objectives. This tension shows itself in many ways:

Should a city try to maximize the revenue from a land sale today, or sell it for less for a use that may generate greater benefits in the long run?

Should a city sell the right to foreclose for back taxes to investors to realize an immediate return, or take title to the properties in order to utilize them – or sell them – in the future?

Should a city approve a minimally acceptable reuse of a site that involves no public financial support, or pursue a more substantial reuse that needs public support to succeed?

This tension, as reflected in the above questions, is most intense when it comes to making decisions about the use and reuse of parcels of land and buildings. A related question, particular to green reuse, is whether the reuse should be seen as a long-term or permanent reuse, or merely as a short-term holding activity to keep the site productive until a “real” reuse is possible.

Balancing short- and long-term goals

Most managers and decision-makers in local government – particularly in today’s difficult fiscal climate – tend to be preoccupied with the short term, in particular how to balance the coming year’s budget, and avoid furloughs or layoffs. Those concerned with the city’s future must be able to show, where appropriate, that a particular choice can realize long-term benefits that significantly outweigh the short-term benefits of an alternative choice, while remaining sensitive to the city’s short-term needs.

Comparing alternatives is difficult, and projecting long-term benefits, particularly indirect benefits, from a particular project is fraught with uncertainty. For example, imagine that a corner lot in a struggling but still viable neighborhood commercial strip – characterized by late 19th century three story buildings forming a street wall – is vacant and available. A private developer proposes to buy the site from the city and build a small convenience store and gas station, offering the city a market price for the land and requiring no subsidy or tax abatement. An alternative proposal would be to build a new three story architecturally and historically compatible building on the site. That proposal would require that the land be sold to the developer for a nominal price, that the city provide five years of tax abatement, and that the city provide a small capital subsidy toward the development cost. Do the economic benefits of the convenience store outweigh the clear aesthetic benefits of the alternative reuse?

It is not a simple question. It is easy enough to compare direct costs and returns, reflected in the taxes generated by each alternative. In all likelihood, since the larger building will – once it goes on the tax rolls – pay more property taxes, the two sets of returns will cross over at some point, meaning that the cumulative return from the three story building will exceed that of the convenience store. That point, however, may be well down the road, too far to be meaningfully weighed against the immediate cost impact. The question of indirect returns then arises, to what extent will each alternative affect the property values and level of economic activity on the rest of the block? While there is a strong case to be made that the initially more expensive alternative will lead to significantly greater indirect returns, it is far from certain. The actual outcomes will be affected by many forces outside the city’s control.

Even though the answers can never be final, the questions still should be asked. The reuse decisions made one year will affect the site, the block and the neighborhood for the next fifty years or more. Despite constant pressure to focus on the immediate and short-term, long-term effects need to be considered and assessed as best they can.